With word the United States is reportedly planning to pump the brakes on the transition to EVs, there is some handwringing on this side of the border about Canada’s own targets on zero-emission vehicles (ZEVs).
“The targets are too aggressive, and the government is not showing any willingness to change the targets,” said David Adams, president and CEO of Toronto-based Global Automakers of Canada.
In the U.S., the Environmental Protection Agency (EPA) is expected to back off a requirement of 60 per cent of vehicle production to be EVs by 2030, according to Reuters, with an announcement coming in March.
“The automotive market is a North American market. It’s not just a Canadian market,” Adams said. “Products that are built in Canada, 85 per cent of those go to the U.S. Likewise, vehicles that are built in the U.S. come into Canada.”
But that harmonization is cracking with Ottawa and Washington on different pages when it comes to the pace of change from internal combustion to ZEVs, he said.
The federal government has said it is committed to achieving 100 per cent zero-emission vehicle sales by 2035 for all new light -duty vehicles, including interim targets of at least 20 per cent by 2026 and at least 60 per cent by 2030.
Adams said the United States has made “significantly more investment in charging infrastructure” to support EV adoption.
“Now, they’re sort of considering maybe that’s not enough and maybe Americans aren’t quite ready to adopt the technology at the pace with which the government had originally laid out.”
CANADA OUT OF STEP WITH U.S.
While in the past Canadian emissions rules were written to mirror the American ones, that changed in December 2023 when the federal government implemented its own standard on ZEVs, said Joanna Kyriazis, director of public affairs at Clean Energy Canada in Ottawa.
“I think they were more ambitious than the industry was expecting,” she said.
She’s not surprised to see the pressure build on Biden from multiple fronts — including manufacturers and the United Auto Workers (UAW) — considering that it’s a presidential election year.
“All of the stars are aligning for weaker regulations in the U.S.,” she said.
The fact Canada has its own rules, layered on top of the American ones, provides an “insurance policy” to ensure they aren’t changed or rolled back by leaders that Canadians didn’t vote for, she said.
Kyriazis doesn’t believe that having different sets of regulations on different sides of the border is a problem.
“The reality is that the U.S. market is already bifurcated. We’ve got clean car states and non-clean car states,” she said. “You’ll also see them referred to as Section 177 states. They’re the states that have decided to adopt California’s clean car rules, including California’s ZEV mandate.”
In total, 17 states representing almost 40 per cent of the U.S. car market have embraced that model, she said.
“Canada is already forced to pick a lane here, and we’ve chosen to align with the 17 U.S. states that have EV ambitions similar to our own,” said Kyriazis.
‘THERE ARE CONCERNS’ IN CANADA
Plus, she points to the significant investment being made in the industry in Canada — with $37 billion in EV and battery-related projects over the last three years.
“We just dethroned China as the top-ranking country in the world for our EV and battery supply chain potential, according to Bloomberg New Energy Finance,” she said. “I know there are concerns about how fast we’re going, but our auto sector and supply chains are ramping up fast and I’m positive we’ll be able to meet our EV goals.”
Jeff Turner, director of mobility at Montreal-based Dunsky Energy + Climate Advisors, said the Canadian rules are providing stability for the industry compared to what he called a “volatile landscape” across the border.
“That volatility is really challenging for a number of the stakeholders who are looking to play an important role in this space,” he said.
For example, they work closely with utilities across Canada who are preparing their power grids for EV adoption.
“It’s really helpful for them to have targets that are set in place so that they can plan around,” said Turner. “If we then layer in, on top of that, that utilities in Canada also have to anticipate changing winds south of the border as well when they’re making investment decisions? It’s going to get pretty tricky for everybody working on this file.”
